Bankruptcy And Surplus Income

The surplus income guideline is regulated by the Office of the Superintendent in Bankruptcy. The 2009 Guideline amount for a family unit of 2 people is $2,328 (take home pay). 

The surplus income guideline is regulated by the Office of the Superintendent in Bankruptcy. The 2009 Guideline amount for a family unit of 2 people is $2,328 (take home pay). The way that surplus income works is that we calculate your average earnings during your bankruptcy (say $7,004), subtract the Guideline amount ($2,328). The difference of $4,676 is called surplus income. When you have surplus income in a bankruptcy, a portion of it must be contributed into the Bankruptcy Estate. At a minimum it will be 50% ($2,338); maximum up to 75%. A couple of things would change the amount of the payment: - the actual number of people in your family unit (are there more than 2 people in your family) - whether or not you both have to actually file for bankruptcy, or just 1 of you.  Surplus would then be pro-rated. - any non-discretionary expenses which are an allowable deduction in calculating surplus income (EG: alimony payments, child support, certain medical expenses, work expenses). This payment is made during the period of time that you are bankrupt. If you've never been bankrupt before, this is typically 9 months. If you've had a previous insolvency, it may be for a longer period. Depending on your situation, you may be able to look at filing a proposal rather than a bankruptcy. Based on your income, and if you have breathing room in your budget, you may be able to look at doing a restructuring proposal to your creditors. Give one of our Trustees or counsellors in your area a call if you like. Donna Carson, CGA, CIRP, Trustee Calgary, Drumheller, Airdrie regions 1.877.500.0792 donna.carson@mnp.ca